Financial News: Triodos Bank Exits Global Climate Agreement of Financial Institutions
The Net-Zero Banking Alliance (NZBA), a global coalition of banks committed to making their portfolios climate-neutral by 2050, has seen several high-profile members departing. Among them is the Dutch bank, Triodos, which left the alliance due to its decision to soften its ambitions.
The exodus of banks from the NZBA includes heavyweights like Bank of America, Citigroup, Morgan Stanley, Wells Fargo, Goldman Sachs, HSBC, Barclays, UBS, and Japanese banks such as Sumitomo Mitsui Financial Group. Reasons for withdrawal vary, with some citing pressure from Republican politicians in the US against restrictions on financing fossil fuels, legal issues like antitrust concerns, and a shift away from the alliance's stringent climate commitment requirements.
However, not all is lost for the NZBA. Rabobank, ABN Amro, and ING have chosen to remain members, viewing the alliance as a valuable platform for questions and sharing experiences with other banks. Rabobank, in particular, values the NZBA as a platform for discussions about climate-related matters.
The NZBA, founded in 2021, has been hailed as the world's most important climate alliance of banks. Its mission is to accelerate the transition to a net-zero emissions economy by empowering its members to use their collective influence to drive change.
In positive news, Finnfund has announced an €80m first close of a digital access impact fund, while Aegon AM has launched a climate transition bond fund. These initiatives underscore the ongoing commitment of some banks to sustainable practices and climate action.
Meanwhile, the NZBA has adjusted its policy to focus more on encouraging green activities and less on cutting down on polluting activities. Banks are no longer required to set a target of limiting global warming to 1.5 degrees Celsius to qualify for NZBA membership.
Elsewhere, JICA has invested $40m in Aavishkaar Capital's supply chain fund, furthering the cause of blended finance, development finance, and impact ecosystems.
As the NZBA evolves, it will be interesting to see how it navigates these changes and maintains its commitment to a sustainable future.
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